Coles will cull the overlap of similar products on its shelves in a move it says is designed to free up space for a wider range of items.
The supermarket giant said an estimated 2500 items will disappear from stores in coming months to remove product duplication.
While Coles says this will allow new product lines, suppliers have previously accused the chain of taking their products off shelves to ‘pressure or punish them’ and ultimately give shoppers less choice.
Coles chief of operations and sustainability officer Anna Croft announced plans to ‘rationalise’ competing products during a recent investor presentation day.
While Coles is yet to specify which products will be slashed, Ms Croft gave the example of 13 basic table salts as an example of a product offering that could be culled.
‘We don’t need those. We might go to five and we might add three different types of salt in to give customers more choice,’ she said.
Also on the chopping block is haircare, with one leading brand currently sold in six different sizes.
Even with two years of upcoming rationalisation, the remaining product range would still exceed what Coles offered in 2019, according to Ms Croft.
‘But we’re reinvesting in the categories in the space that makes the most amount of difference to customers,’ Ms Croft explained.
‘This is about removing duplication but adding choice.’
Coles will bring in US management consultants Bain to help implement the reductions.
The n Food and Grocery Council, which represents wholesalers, has previously told the n Competition and Consumer Commission that supermarkets use the threat of product removal to squeeze margins on suppliers.
‘A supermarket’s threat to delist can result in commercial detriment for the supplier,’ the council said.
‘While suppliers can recommend a retail price, the supermarkets ultimately control the shelf price.’
The council said the reason supermarkets delisted products was ‘not transparent and widely open to interpretation’.
‘The AFGC is aware of numerous cases in which the supermarkets have raised shelf prices, resulting in a decline in sales, then initiated discussions on delisting the product unless they are provided with further financial support such as increased margin or additional promotions,’ the council said.
‘In such cases, the supplier is commercially harmed by a decision made independently by the supermarket regarding its shelf price.’
A Coles spokesperson said the company aimed to build strong, collaborative relationships with their suppliers.
‘Coles takes compliance with n Consumer Law very seriously, and we place great emphasis on building trust with all of our stakeholders, particularly our customers, team and suppliers,’ they said.
‘We hold regular listening sessions with our customers and work with our suppliers to tailor our ranges to meet our customers’ needs, removing duplication of products to make it easier for them to find products that suit their budgets.’
The federal government last year ordered the ACCC to set up an inquiry into the pricing practices of the supermarkets.
The inquiry, which is looking into relationship between wholesale, including farmgate and retail prices, is due to be handed to the federal government shortly.